There are two reasons for the recovery, well, so far it is only an upward correction, for the Greenback. First there is the still intact inverted correlation with the stock markets, and these are prone for further downward corrections this week. We had our summer rally in these markets, usually followed by a correction phase in autumn. And then the European economic data seems no longer to support the Euro for example – much more influence seems to come from the technical aspect of an oversold USD.

Accordingly we put our trading bands for the USD higher in the detailed list of the major pairs, with the Yen as a special case as usual. There are several US economic data published at 14:30 CET, but none of them is really market moving, since they represent only lagging indicators for the economy. Market moving will be the FOMC minutes, published at 20:00 CET.

Intraday Market Outlook for Day Traders

EUR/USD
The Euro consolidates its lower levels against the Dollar in this European morning, currently trading near support at 1.4225. Right now in a very slow upward correction, we expect this move to fade soon, opening more downward room for today, first breaking the 1.4200 support level and then testing the 1.4150 support.

GBP/USD
Cable went below its recent lows, and is about to test 1.6100 handle level. Trading right now at 1.6150, the recovery attempts this European morning are feeble. For today's trading, we expect first a test of the 1.6100 level, witch will probably be broken on the downside, reaching new lows around 1.6030.

USD/CHF
After gaining strength against the Swiss Franc, the Dollar currently trades at 1.0665, starting early European trading in a very quiet, dull market. We see that low volatility consolidation to continue somewhat, but later in the day another buying mood setting in, bringing the market to resistance around 1.0740.

USD/JPY
The downtrend of the Dollar against the Yen was picked up again in all of Asian trading, bringing the market to new short term lows around 92.50. The usual up correction has set in now in early European trading, (the market right now at 92.90) which we expect to be short lived. Consequently we envisage new lows later today, around 91.20.